VITAKRAFT CASE

Vitakraft Case

Vitakraft Case

Question 1:

Vitakraft' international expansion is often triggered by external ad-hoc signals such as the activities of customers, suppliers, or partners. Moreover, vitakraft is not much fettered by bureaucracy and hierarchical thinking. Top managers' personal initiatives can often drive internationalization at an accelerated pace, especially for innovation-oriented vitakraft. Compared to experiential learning and systematic planning models, our hybrid model is relatively flexible in the sense that the process is neither predetermined nor linearly sequential. Thus, it may assist vitakraft managers in weighing on emergent internationalization processes and/or making sense out of competitors' internationalization strategies.

The business world in cat and dog food industry in which evolve private entities is currently favourable to internationalization, because all the key factors required are gathered:the technical factor: development of international transportation, evolution of the means of communication,-the economic factor: higher qualification of the workforce event, the partial standardization of the consumer behaviours,-the political factor: decrease of the customs tariffs, creation of free trade areas and economic communities, and incitation of public authorities.

In what concerns the internal reasons, internationalizing permits to allocate risks more efficiently between different countries, to prevent oneself from potential economic crisis and currencies fluctuation, to restrict the risk of dependence from a single country, to find countries where competition is less active and hence give a new life to a product(Ghemawat, 2004, pp.70-90).

Internationalizing also gives competitive advantages like access to cheap workforce and available resources as well as local financial and taxes incentives.

Concerning the external reasons, internationalization can be required to cope with the evolution of the local market in which the company is based. Indeed, when the national market reaches the saturation stage, it becomes difficult to gain new market shares. There are others reasons that go in the way of internationalization like keeping in mind the evolution of other markets: because competition becomes more international, not internationalizing means losing market shares(Chiesa, 2000, pp.341-359).

There are several forms of motives for Vitakraft for internationalization process: First, exportation means selling a product in a different country than one's original country. Sales can be direct or indirect depending on whether the company sells products itself or uses intermediaries to do so. Noticeable advantages are a higher margin, the accumulation of experience, the rapid acknowledgement of the markets, the time spared, cheaper means of exportation.

Secondly, the associate exportation can for instance be a firm that uses the commercial competencies of another firm so as to sell its products abroad. Hence, the company benefits from the experience of a bigger firm, from the cultural promiscuity and from the Vitakraft's reputation.

Third of all, the shared subsidiary or «joint venture», which is when an exporting business creates a subsidiary whose management, is shared with a local partner. The main advantage lies in the reduction of risks and investments as well as a better knowledge of the local environment.

Outsourcing corresponds to the transfer of the activities from one country to another. Hence can the Vitakraft put limits on its costs production, get closer to consumers and avoid the ...